" />

Bitcoin value based mostly on belief, trust in people behind cryptocurrency startups

Image still from Monty Python's Flying Circus
Bitcoin value based mostly on belief, trust in people behind cryptocurrency startups

What’s staggering about the recent surge in Bitcoin value, along with Coinbase becoming the first cryptocurrency unicorn, is that the value is mostly based on belief and trust in the startups operating them.

Last week, Coinbase became the first cryptocurrency unicorn while the value of Bitcoin surged 30% over the past week.

According to FutureLab Consulting Partner Moses Ma in Psychology Today, the explosion of value in cryptocurrencies all has to do with faith in the people behind the technology.

“Things are worth what people believe it’s worth,” wrote Ma, who likened the value of Bitcoin to the intrinsic value of Kim Kardashian.

“Kardashian is only famous for being famous, as she enjoys no other intrinsic, artistic value as a performer or entertainer. Bitcoin having no intrinsic value, except for the value of consensus, is more like a tulip auction without any tulip,” wrote Ma.

The idea of belief and trust is what’s at the heart of the cryptocurrency craze, and when Silicon Valley-based Greylock Partners contributed to Coinbase’s $100 million Series D investment round, Greylock Partner Josh McFarland had this to say about trust (I’ve highlighted some of the words for emphasis).

“Coinbase is a beacon of trust in this rapidly evolving and sometimes murky market […] The initial appeal of digital currencies was that they did not require trust of any central entity, since users could control funds on their own.”

“A few months ago, my colleague and Greylock investor Matt Heiman introduced me to Brian Armstrong and his team at Coinbase […] As Brian laid out Coinbase’s progress and plan, it became clear they are building something much more transformative — and contrarian — than is apparent […] We believe that mass market adoption of digital currencies will come via a trusted entity like Coinbase, which is built on a custodial architecture.”

Trust and belief. McFarland’s belief in Heiman set in motion Greylock’s trust in Coinbase.

In a digital world where everything is becoming automated by machines and where even the currency has become digital, trust and belief in the people behind the technology is what drives the perceived value.

View Comments (3)


  1. Gem man

    August 17, 2017 at 10:46 AM

    Trust the establishment or not? Isn’t that the essence of coinbase vs bitcoin?

    • admin

      August 17, 2017 at 11:52 AM

      The same goes for any currency. Belief.

  2. madden 18 coins xbox one sale

    August 30, 2017 at 7:44 AM

    I have no idea what you have said

Leave a Reply

Your email address will not be published. Required fields are marked *


Tim Hinchliffe is a veteran journalist whose passions include writing about how technology impacts society and Artificial Intelligence. He prefers writing in-depth, interesting features that people actually want to read. Previously, he worked as a reporter for the Ghanaian Chronicle in West Africa, and Colombia Reports in South America. tim@sociable.co

More in Technology

hearts and arrows

Hearts and Arrows Diamonds – What Makes Them So Popular?

Kavinesh ArumugamNovember 16, 2017
cancer ai

First coding and now cancer, AI is transforming the healthcare industry

Nishtha SinghNovember 16, 2017
logistics amazon

3 Logistics Startups Helping Businesses Stay Competitive in the Amazon Era

Zac LavalNovember 14, 2017
zuckerberg president

Zuckerberg is running for president, even if he never runs: KU interview analysis

Ben AllenNovember 13, 2017
bitcoin blockchain

Trust no one: the story of Blockchain and Bitcoin

Omar ElorfalyNovember 10, 2017
entrepreneur, restaurant, lyft, startup

The entrepreneur who became a Lyft driver to conduct customer research: interview

Ben AllenNovember 9, 2017
startups hangovers

Startups and technology to alleviate hangovers from hell

Sam Brake GuiaNovember 8, 2017
ar new york fashion week

Fresh off landmark court battle, Candy Lab teams up with LDJ Futures to unveil new AR experience at New York Fashion Week ‘18

Peter AndringaNovember 8, 2017
digital transformation help

All Hands on Deck: When to Bring On Extra Help For Your Digital Transformation

Alejandro VasquezNovember 7, 2017